Academic journal article China Perspectives

The Role of China in Global Energy Governance

Academic journal article China Perspectives

The Role of China in Global Energy Governance

Article excerpt

Introduction(1)

Global energy security is put at risk by the uneasy relationship between the international political system and the international energy system. The political framework of the International Energy Agency (IEA) was created to manage energy security in the developed world and in relations with producing countries in OPEC. Both recognise a need for a more comprehensive producer-consumer dialogue. However, the everexpanding energy demand of the developing world, the "globalisation of energy demand," and the emergence of non-OPEC producing countries that now account for 60% of world oil production fall outside of that framework. China, the world's largest net oil importer, remains outside the IEA, as does India. Their resistance to the norms of global energy governance makes them reluctant to participate in these international institutions, producing gaps in global energy governance. It is in the ungoverned space of world oil production and consumption that China implements its resource diplomacy and promotes alternative institutions.

Beijing began its association with the IEA in 1996 as a non-member economy, holding workshops and seminars. There is a special IEA office for relations with China. For China, membership in the IEA would be difficult due to the requirement of holding a 90-day strategic petroleum reserve (SPR). As a non-member, China is reluctant to disclose petroleum data to the IEA, which Chinese feel only serves the interests of OECD members rather than the good of the international community.

The strongest platforms for Chinese participation in global energy governance are situated in OECD countries, such as the IEA, the Energy Charter, and numerous energy research institutions. These OECD resources can best help reform Chinese domestic energy governance. However, China's further integration into the current energy governance system would require further domestic energy policy reform.

Alternatively, China could restructure the global energy governance system in such a way as to put less pressure for reform on its domestic energy economy. Chinese energy diplomacy has thus concentrated on constructing an alternative energy governance structure in the BRICS organisation, the Shanghai Cooperation Organisation (SCO), and in Central Asia through the Silk Road initiative.

The construction of international energy institutions is generally understood within the liberal institutionalist approach. This theoretical approach is useful for the topic of Chinese domestic and international energy politics because it does not draw a hard line between domestic and international politics.(2)The approach is also useful as it treats international institutions as a solution for overcoming dysfunctionalities, the "dark underbelly" of corruption in the world oil economy. The liberal institutionalist approach has embedded in it the promotion of certain liberal values - corporate social responsibility, transparency, regulation of illicit trade, good governance, economic liberalisation - that are meant to create global and regional order. (3) These are values that the IEA promotes but would not necessarily be promoted by the BRICS. BRICS domestic energy governance in China, Russia, and Brazil is plagued by corruption, and does not conform to best practices. Central Asia's energy-producing countries have similar problems.

China and the other BRICS nations have not elaborated on a theory appropriate for their alternative international energy institutions. Chinese scholars recognise China's theory deficit in global governance.(4) Chinese have said they want new rules and institutions for global energy governance but have not defined them.

Russian scholar Dmitri Trenin, addressing a Chinese audience, warns BRICS that seeking a new world order will not be realised by overthrowing the existing US-led world order but rather by a triumph of "global best practices" as viable alternatives to current business practices. …

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